Mecon Project Overview and Key Results (Myanmar)

1. Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Aung Thet Paing
9 October 2015
2nd Stakeholders Workshop
Myanmar Engineering Society
MECON Project overview
and key results

2. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project objectives
• Identify the opportunities and barriers to the
adoption of EE technologies for low income
households before they become middle
income: “new Modern Energy CONsumers” in
Greater Mekong Subregion

3. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project consortium
Myanmar
Engineering
Society (MES)
Joint Graduate School
of Energy &
Environment (JGSEE)
Royal University
of Agriculture
(RUA)
Hanoi University of
Science & Technology
(HUST)
National
University of Laos
(NUOL)
University College
London (UCL)

4. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON project approach
PHASE 1: background information
PHASE 3: dissemination
PHASE 2: development & consultation

5. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Energy efficiency is most cost-efficient solution for
CO2 emission reduction and improved energy security
Energy efficiency: something to gain for everyone
World energy-related CO2 emissions abatement in the 450 Scenario relative to
the New Policies Scenario (WEO, 2012)
IEA World Energy Outlook, 2012

6. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Energy security: increasing energy demand due
to growth middle income households
• A new middle class – the population living above the poverty line
but still with low incomes - is emerging, especially in Asia:
responsible for large share of increase energy demand

7. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
New Modern Energy Consumers
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• In 2008, new modern energy consumers accounted for 45.4% of the population in
Thailand.
• MECON share has already peaked in Thailand; peaking in Vietnam; and yet to peak in
Cambodia, Laos and Myanmar.
• Thailand will decrease to 24% by 2030.
• In Laos, Cambodia and Myanmar, the share of the MECON is expected to be in the range of
40-50% in 2030
0
10
20
30
40
50
60
0 5 10 15 20 25 30 35 40 45 50
2-5$ SHARE (%)
Es mated (General)
Actual-Thai (%)
Vietnam

8. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON Energy Consumptions
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Three scenarios have been developed for each
countries (residential sector only) using LEAP
model
• Business As Usual (BAU) Scenario
• High Energy Efficiency (HEE) Scenario
• Moderate Energy Efficiency (MEE) Scenario
• Modeling MECON households during 2013-2030
• Assumptions on share of EE appliances in 2030 is
country and technology specific

9. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Energy consumptions under different
scenarios in GMS countries
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• In 2030, EE can reduce residential (MECON) energy consumptions by
2% (Thailand) -20% (Myanmar) in MEE and 16% (Thailand)-38%
(Myanmar) in HEE compared to that of BAU scenario
• Highest potential, in terms of percentage reduction, is in light bulbs

10. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Electricity Consumptions
Low Income HH
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
-
50.000
100.000
150.000
200.000
250.000
300.000
350.000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
ThousandTonsofOilEquivalent
Myanmar BAU scenario
Myanmar High EE scenario
Myanmar Medium EE scenario
20% to 38%

11. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Highest potential reduction; Lighting
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
-
20.000
40.000
60.000
80.000
100.000
120.000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
ThousandTonsofOilEquivalent
Myanmar BAU scenario
Myanmar High EE scenario
Myanmar Medium EE scenario
45% to 80%

12. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Potential reduction; Other appliances
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
-
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
2014 2016 2018 2020 2022 2024 2026 2028 2030
ThousandTonsofOil
Equivalent
-
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
2014 2016 2018 2020 2022 2024 2026 2028 2030
ThousandTonsofOil
Equivalent
-
5.000
10.000
15.000
20.000
25.000
30.000
2014 2016 2018 2020 2022 2024 2026 2028 2030
ThousandTonsofOil
Equivalent
-
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
2014 2016 2018 2020 2022 2024 2026 2028 2030
ThousandTonsofOil
Equivalent
Cooking Cooling
Entertainment Others

13. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Rebound Effect
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• A simple questionnaire survey has been carried
out (over 100 households) to understand what
would household do with additional income
coming from reduced energy bill
• The questionnaire focused on:
• Information about the household
• Household energy consumption
• Rebound effect

14. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Spending Priorities
• Spending priorities vary between the five countries, but some
trends:
– Food is a priority
– Electrical appliances were ranked 4-6 in most countries
– Expenditure on cooking fuels was only ranked highly in Thailand
– Healthcare was important in Cambodia, Myanmar and Vietnam
– Education was important in Lao PDR, Myanmar and Vietnam
• Expenditure on energy is not currently a top priority for MECON
households, but this may change as incomes rise
• MECON households may consume more energy when their income
increased on cooking fuels, purchase of new appliances, and more
usage on existing ones.

15. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Household survey
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
2517 2634
1664
3251
3037
0
500
1000
1500
2000
2500
3000
3500
kWh/year
Electricity consumption
per household
Common appliances found
• Lighting devices (fluorescent)
• Rice cooker
• Refrigerator
• Electric fan
• TV
Policy makers should not neglect
small appliances
For low-income households,
small appliances (rice cooker and
electric fan) can consume more
electricity than large appliances
(AC and washing machine) due to
longer using hours and several
amount of items per household.

16. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Household survey:
EE awareness versus Price
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Initial price of the products
still plays important role in
consumers’ purchasing
decisions.
• Financial barriers exist
amongst low-income
households.
• Low-cost access to finance
may provide a potential
solution by means of
innovative financial models,
for instance, “on-bill finance”
or “microfinance”.

17. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Market survey:
more focus on supply chain
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Retailers may need more education on EE.
• Collaboration amongst retailers, wholesalers, and producers can encourage
higher awareness and knowledge sharing.
• Upstream subsidy may provide incentive for retailers to stock more EE
appliances.
Consumer side
• Purchasing behavior in consumers
• Limited access to EE appliances
Supplier side
• Low capacity to stock EE appliances
• Low awareness and knowledge on EE
technologies amongst retailers
Low availability of EE products

18. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Awareness & Energy Labeling
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Awareness
 Lack of public awareness on Energy efficiency that can
save household expenditures
 Energy Labels
 Myanmar do not have own energy labels
 Products with energy labels are available in the market
 Lack of awareness on energy labels

19. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Market survey: energy labels in GMS
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Only Thailand and Vietnam have energy efficient
label for household appliances.
• Most energy efficient products in the GMS
countries are imported from Thailand and
contain Thailand’s Energy Label No.5.

20. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Energy Labels in Myanmar
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion

21. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Primary student knows Thailand
Energy label 5 via Thai TV ad
 Graduate, Electrical appliance
retailer do not know EE labels
Awareness case
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Mon &
Kayin State

22. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Challenges for EE policy:
amongst the GMS countries
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Common barriers
 Information failure: which appliance is more efficient?
 Lack of awareness and low priority of energy efficiency
 Availability of EE products, especially in remote areas

23. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Challenges concerning with
Electricity Supply
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Electricity tariff is too low (Electricity price)
 Government subsidize on electricity generation
 Quality of electricity is less reliable (Unstable electricity)
 Damages on electric household appliances because of
Voltage fluctuations
 Different payment methods in some rural areas

24. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Electricity Tariff for Residential
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Electricity Consumption
Price per unit
(kyat/kWh)
Price per unit
(USD/kWh)
The first 100 kWh (1-100 kWh) 35 0.035 (3.5 Cent)
The next 100 kWh (101-200 kWh) 40 0.04 (4 Cent)
Above 200 kWh 50 0.05 (5 Cent)
Maintenance fee
500 kyat
per month
0.5 (50 Cent)
Electricity tariff is very low in the region

25. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Range of electricity consumption and
cost (Residential)
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Electricity consumption
Electricity cost
(kyat)
Electricity cost
(USD)
The first 100 kWh (1-100 kWh/month) 535 ~ 4000 0.5 ~ 4
The next 100 kWh (101-200
kWh/month)
4040 ~ 8000 4 ~ 8
Units above 200 kWh/month > 8000 > 8
Avg. Electricity Charges is about 3.5% of HH income

26. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Household Income Vs. Electricity Charges
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON Income range:
120,000 Kyat – 360,000 Kyat
Electricity Charges range:
3,000 Kyat – 30,000 Kyat
Average Electricity Charges
HH Income range Avg. E-Charges
120,000 – 180,000 : 5300 Kyat
180,000 – 240,000: 7500 Kyat
240,000 – 300,000: 8700 Kyat
300,000 – 360,000: 10900 Kyat
Avg. Electricity Charges
3.5% of HH income

27. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Power Transmission Lines
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Existing Lines Planned Lines

28. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Fixed payment on each electrical
appliance
 Prevent interest on Energy Efficiency
Different Payment Methods
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Shan State

29. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Cost – Benefit Analysis
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Upfront cost of EE appliances are 2 to 5 time more than the
conventional types
 After using several years, total cost (initial cost + operational
cost) of the conventional type appliances are still cheaper
than the EE appliances
 Replacement for damage due to unstable electricity also
affects the cost of using EE appliances
 Fixed cost for each products make choosing the low initial
cost products (or) choosing bigger is better idea

30. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Is it cost effective?
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Simple equations were used to carry out cost benefit
analysis for selected appliances (at least five per
country): light bulbs, rice cooker, AC, TV, Fan and
refrigerator.
 The selections of appliances for the CBA are based on
three criteria: energy consumption, ownership and
future potential.
 Sensitivity analysis were carried out with hurdle rates

31. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Cumulative discounted cost over the
time: Myanmar
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
• Payback period for light bulb is 2 years and rice cooker is more
than 10 years
• High initial cost of EE products and low electricity tariff
0.00
1.00
2.00
3.00
4.00
5.00
6.00
1 2 3 4 5 6 7 8 9 10
USD
Year
Fluorescent
light bulb
LED light
bulb
0
50
100
150
200
1 2 3 4 5 6 7 8 9 10
USD
Year
Conventiona
l rice cooker
Efficient rice
cooker

32. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Challenges concerning with
Standards & Regulations
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
 Lack of mandatory MEPS (Minimum Energy Performance
Standards)
 Low quality low price products can enter into the market
 Lack of economical incentives for EE appliances, e.g. tax
exemptions etc. on EE appliances
 Retailers have not much interest on the EE appliances
 End-users only interest on upfront cost
 Lack of regulations for EE appliances market
 No restriction on the product quality

33. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Policy considerations on Residential
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Challenges Policy considerations
Electricity Supply  Stable electricity supply should be provided
 Electricity price should not be subsidized
 Payment methods should be gradually changed to become uniform
 Have to consider alternative short term programs for lighting and
cooking in rural areas (off-grid areas)
Standards and
Regulations
 Minimum Energy Performance Standards (MEPS) for appliances should
be introduced
 Regulations are issued according to the MEPS to control the quality of
the products
 Trade incentives on EE products should be made, E.g. tax exemptions
 Improvement is needed in financial mechanism & schemes
Awareness  Awareness programs are promoted through public media such as
newspapers, TV, radios etc.
 Trainings, workshops, EE exhibitions should be done regularly
 Create Energy awards

34. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional models for EE
34
Type Brief description Example
1
Government agency
(GA)
Agency with broad energy responsibilities U.S. Department of Energy
2
Government agency
(GA)
Agency focusing primarily on clean energy
(EE/RE/SE)
Thailand: DEDE
3
Government agency
(GA)
Agency focusing entirely on EE Mexico: PROCEL
4
Independent statutory
authority (ISA)
An independent authority created by statute
to promote EE or clean energy
U.K. Energy Saving Trust
5
Independent
corporation
(gov. owned)
An independent corporation owned entirely
by the government
Korea Energy Management
Corporation
6
Public-private
partnership (PPP)
A corporation owned partly by the
government and partly by the private sector
Germany: DENA
7
Non-governmental
organization (NGO)
Nonprofit or nongovernmental organization Austrian Energy Agency

35. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional models for EE: pros & cons
35
Type Advantage Disadvantage
1
GA with broad energy
responsibilities
Greater credibility
Have access to public funding
Large bureaucracy
Rivalry with other energy programs
2
GA focusing primarily
on EE/RE/SE
Consistent focus with EE
Greater voice in gaining resource for EE
Competition between technologies
Narrower focus, less influence
3
GA focusing entirely
on EE
Pro-EE agency culture
More dynamic management
Agency must compete for resources
Narrower focus, less influence
4
Independent statutory
authority (ISA)
Operational discretion
Flexibility
Require legislation to change scope
Competition with public agencies
5
Independent
corporation (gov.
owned)
Have access to private-sector input
Flexibility
Less access to public funding
Competition with public agencies
6
Public-private
partnership (PPP)
More access to private-sector input
Flexibility
Conflicts between public and
private perspectives
7
Non-governmental
organization (NGO)
Greater credibility to some stakeholders
Flexibility
May be lack of creditability to
public and private sectors

36. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
MECON analysis
36
1. Stakeholder mapping of institutions acting in the
field of energy efficiency in each GMS country
2. Survey to capture the information on institutional
structure related to EE
3. Analysis of energy prices to discuss energy price
market failures
4. Development of tool to support discussions on
institutional model and room for improvement

37. TOPIC 1
Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Institutional setting
of the GMS countries
37
Myanmar LAO PDR Vietnam Thailand Cambodia
Responsible
government
agency
Energy
Efficiency and
Conservation
Department,
Ministry of
Industry (MoI)
Department of
Energy Policy
and Planning
(?), MoE
Energy
Efficiency and
Conservation
(EEC) Office,
Ministry of
Industry and
Trade (MoIT)
DEDE (& EPPO),
MoE
Department of
New and
Renewable
Energy, MME
Type of
organization
Model 1? Model 1? Model 1 or 3? Model 2 Model 1?
Further
analysis
Is the department
offering sufficient
institutional
capacity for EE?
Is the department
offering sufficient
institutional
capacity for EE?
Is EEC a separate
agency or part of
MoIT? Sufficient
capacity for EE?
Are roles and
responsibilities
DEDE and EPPO
suff. distinctive?
Is the department
offering sufficient
institutional
capacity for EE?
Room for
improvement?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?
New or adjusted
institution. model
recommended?

38. Effective energy efficiency policy implementation targeting
“New Modern Energy CONsumers” in the Greater Mekong Subregion
Thank you for listening
www.meconproject.com